Australian company Newcrest Mining (ASX: NCM) has received a US$17b billion conditional and non-binding indicative takeover bid from global gold producer Newmont Corporation (NYSE: NEM, TSX: NGT).
The offer proposes to acquire 100% of the issued shares of Newcrest through a scheme of arrangement where investors would be entitled to receive 0.380 Newmont shares for each Newcrest share held.
This implies a current offer price of AUD$27.16 per Newcrest share based on the exchange rate on 3 February.
The indicative bid is subject to a number of conditions including due diligence, the granting of exclusivity to Newmont and approvals by Newmont shareholders, the mining regulator and the Foreign Investment Review Board.
This offer also contemplates the establishment of a Chess Depositary Interest listing on the Australian Stock Exchange for new Newmont shares issued to Newcrest shareholders.
Newcrest’s board of directors is considering the bid in collaboration with financial advisers JP Morgan and Gresham Advisory Partners and legal adviser Herbert Smith Freehills.
The company has recommended shareholders take no action at this point in time.
World’s biggest gold producer
Based in Colorado, Newmont is currently the world’s biggest gold producer by market value and ounces produced.
It has operations across the globe in gold, copper, silver, zinc and lead, including two major Australian gold mines at Boddington in Western Australia and Tanami in the Northern Territory.
Newcrest is Australia’s largest gold miner with operations in New South Wales and Western Australia, an expanding footprint in North America and Papua New Guinea, and growth potential in copper which is integral to the global energy transition.
One of the largest deals in Australian history
If successful, Newmont’s latest grab for Newcrest would be the largest merger and acquisition deal announced so far this year.
It would also become the largest mining takeover and the third largest corporate buyout in Australian history.
The largest being Square Inc’s acquisition of Afterpay for AUD$39 billion, back in 2021.
Newmont was knocked back on an earlier indicative, non-binding and conditional proposal to acquire Newcrest at an exchange ratio of 0.363 Newmont shares for each Newcrest share.
Newmont confirmed it made its latest offer via statement, saying the deal “presents a powerful value proposition” to both businesses.